Readers of this blog may recall a piece in which we discussed an unfavorable
Ninth Circuit California Invasion of Privacy Act
(“CIPA”) internet wiretapping decision. Interestingly,
the Ninth Circuit recently weighed in again on similar internet
wiretapping claims, and this time, it reached a very different
outcome. Below, we discuss the decision’s impact and its
implications on present and future internet wiretapping claims.
Are Internet Wiretapping Lawsuits Shakedowns?
At least one Ninth Circuit judge thinks that the possibility
exists. In Gutierrez v. Converse Inc., Gutierrez
alleged that Converse violated CIPA by wiretapping her internet
communications with its website chat feature. Because the website chat
function was operated by a third-party, Gutierrez asserted that
Converse violated CIPA by illegally wiretapping his internet
communications. The district court found that no disputes of
material fact existed because Gutierrez failed to provide
sufficient evidence that the third-party: (1) made an unauthorized
connection with Gutierrez’s communications; and (2) read or
attempted to read the contents of her communications. On appeal,
the Ninth Circuit panel unanimously affirmed the granting of
summary judgment for Converse. While two of the judges affirmed the
district court on evidentiary grounds, the third judge sitting on
the panel wrote a separate, concurring opinion which may finally
put an end to CIPA wiretapping claims.
In his concurrence, Judge Bybee looked at the plain language of
the statute and concluded that CIPA’s wiretapping provisions do
not apply to internet communications. Despite amending CIPA on at
least three occasions, Judge Bybee noted that the California
legislature had not updated CIPA’s wiretapping clause to
account for advances in technology, such as smartphones, which it
certainly could have. Judge Bybee then questioned why plaintiffs,
like Gutierrez, “contort § 631(a) [CIPA] to apply to
internet communications” when plaintiffs can seek recourse
under the California Consumer Privacy Act
(“CCPA”). Contrasting the private rights of action
allowed for under CIPA and the CCPA, Judge Bybee explicitly
identified the reason that plaintiffs like Gutierrez assert CIPA
wiretapping claims by stating “[i]t may be about the money
– CIPA allows plaintiffs to recover $5,000 per violation
compared to just $750 per violation under the CCPA. In a class
action like this one, the difference in total recovery (and
attorneys’ fees) could be millions of dollars.” As Judge
Bybee stated, if the California legislature wanted to apply
CIPA’s wiretapping provision to the internet it could have
– it is not the Court’s responsibility to do the
California legislature’s job.
What Does This Mean for Future Internet Wiretapping
Claims?
Although this unpublished decision may have limited precedential value, Judge Bybee’s
concurrence is a breath of fresh air for online companies. The
opinion echoes a refrain that the attorneys at Klein Moynihan Turco (“KMT”) have
argued since internet wiretapping lawsuits began – the plain
language of CIPA does not extend to internet communications. The
impact of this opinion remains to be seen, and it must be noted
that the district court evaluated and ruled on Gutierrez’s
claims at the summary judgment stage, which requires plaintiffs to
put forth evidence substantiating their claims. Although this
opinion is unlikely to stop internet wiretapping lawsuits from
being filed, it may well lead other California federal judges to
agree with Judge Bybee and rule that CIPA’s wiretapping clause
does not apply to internet communications.
The use of third-party tracking software (including pixels and
web beacons) is nearly ubiquitous, and online businesses must
frequently review and update their privacy policies to ensure that
they inform consumers about data collection, use, and sharing
practices. Because federal and state privacy laws are constantly
evolving, companies must carefully review their websites to ensure
that they are providing adequate notice to (and, ideally, obtaining
consent from) website visitors of the use of third-party tracking
software.
The attorneys at KMT regularly assist companies with federal and
state marketing and consumer privacy law compliance. In addition,
the KMT litigation team has successfully defended numerous
businesses against federal and state privacy law claims across the
country.
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